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Budget, state funding policy statement

In June 2011, the Michigan State University Board of Trustees adopted 2011-12 budget development guidelines designed not only to preserve and build upon MSU’s strength and stature as one of the world’s top 100 research institutions, but also to provide continued stewardship of one of the state’s most critical knowledge economy assets.

Budget guidelines were based on a 15 percent reduction in state appropriations. This year’s state appropriations are about $241.1 million, a decrease of $42.6 million from 2010-11. Since 2000-01, MSU has seen appropriation reductions of 25 percent, representing a loss of more than $330 million in operational resources over 12 years.

Despite constrained resources, MSU maintains its status as one of the top 100 universities in the world by focusing its resources where they count, consistently ranking first or second in the Big Ten for proportion of expenditures dedicated to instruction, research and public service. As a result, MSU is able to approximate the average Big Ten student to faculty ratio of 16-1. MSU faculty salaries—ranking 10th of 12 Big Ten institutions—are being closely monitored to be sure we are able to attract and retain talented faculty.

Operating expenditures have been reduced by 10 percent, or by approximately $50 million, resulting in employee counts decreasing by 350 people in the past two years. Health care expenditures were reduced by 10 percent in FY11, funded future increases were capped at 5 percent, and retiree health benefits eliminated for new employees. All regular employees gave up one year of salary increases.

By creating jobs, attracting external research support and improving the earning potential of Michigan residents and their subsequent tax contributions, MSU’s economic impact in Michigan approximates $4.1 billion. MSU continues to see its research enterprise expand, with sponsored research totaling $495 million last year, an increase of about $90 million from the year before. In addition, MSU is a member of the University Research Corridor—a research and job-creation initiative with the University of Michigan and Wayne State University—a venture that has a nearly $15 billion economic impact in Michigan.

For more information on MSU's budget and planning, go to